New Delhi: In a serious setback to clinical research in India, the National Institutes of Health (NIH), a part of the US department of health and human services, has cancelled approximately 40 ongoing clinical trials in the country, according to two people familiar with the development who asked not to be identified. NIH is one of the largest funders of research across the world.

The move comes as the health ministry, after the Supreme Court’s intervention, tightened regulatory norms for trials. The health ministry amended the Drugs and Cosmetics Act with new laws for regulation and ethical supervision of trials; compensation of trial subjects; and mandatory accreditation of all stakeholders—institutional review boards, research institutions, sponsors and contract research organizations.

According to industry experts, an unstable regulatory environment has resulted in sponsors moving trials to favourable destinations such as Malaysia and Canada in the past six months. NIH and the US embassy did not respond to queries emailed to them on 4 July.

Besides NIH, leading medical centres in the country such as Tata Memorial Hospital in Mumbai have also been hit by the regulatory chaos.

“The Drugs Controller General of India made it mandatory to register ethics committees. While this is a welcome step, they took nearly three months to register our committee. During this time, we could not start any trials. Slow turnaround time and lack of clarity in regulation have seen sponsored research slow down drastically. Even academic research has suffered in the past three months,” said C.S. Pramesh, chief of cardiothoracic surgery at Tata Memorial.

One of the people familiar with the development said the $500 million (around Rs.3,000 crore) industry is functioning at one-fifth of its capacity currently.

M.K. Bhan, a former secretary with the biotechnology department, said the current crisis in the sector is a consequence of the government’s “overreaction”.

“There were problems in the way some trials were conducted as well as issues in the way clinical trials are governed. What we’ve seen now is a bit of an overreaction as part of course correction. There will be balance soon,” he said.

Bhan added that there was a technical committee examining the new rules in place for the clinical trials industry and it would be a matter of time before these problems were dealt with. Bhan was part of a nationwide group of researchers who, earlier this year, successfully announced the success of advanced, phase-3 trials of an indigenous, rotavirus vaccine known as Rotavac.

Meanwhile, industry executives maintain that patients have suffered the most. “Given the fact that we have the world’s highest disease burden, the most impacted by an unstable regulatory environment are patients for many of whom clinical research provided early access to new therapies and is often the only viable treatment option,” said Anil Raghavan, managing director of Quintiles India, a a contract research organization.

According to documents submitted by the Drugs Controller General of India in the Supreme Court, between January 2005 and June 2012, India approved 475 clinical trials for “new chemical entities” not used as drugs elsewhere in the world. The documents said that 11,972 adverse effects, excluding deaths, were reported in the period, with 506 of these being directly attributable to the trials. They put deaths from trials at 2,644 over the last five years.